Published by: S&B Advisors and Consultants (Private) Limited
Author: Ms. Saima Morkas
Date: July 29, 2025
In a landmark reform to enhance market efficiency and global competitiveness, the Pakistan Stock Exchange (PSX), in collaboration with National Clearing Company of Pakistan Limited (NCCPL) and Central Depository Company (CDC), has announced a transition from the current T+2 settlement cycle to T+1, effective October 14, 2025.
This move brings Pakistan in line with advanced global markets, promising faster settlements, lower risk, and greater investor confidence.
🔄 What is T+1 Settlement?
Under a T+1 settlement cycle, trades executed on a trading day (“T”) are settled the very next business day. This is a major change from the current T+2 framework, where settlement occurs two business days post-trade.
🚀 Key Benefits of T+1
✅ Faster Access to Funds and Securities
Investors can receive proceeds or shares within one day, improving liquidity and reinvestment efficiency.
✅ Reduced Counterparty & Operational Risk
Shorter cycles minimize exposure to market volatility and technical or administrative errors.
✅ Boosted Market Efficiency
Quicker settlements mean improved turnover and smoother cash flows, fostering higher trading volumes.
✅ Global Alignment
Major markets like the U.S. (since May 2024) and India (since 2023) have already adopted T+1, making this shift critical for PSX to remain globally relevant.
🛡️ Clearing Confusion: February 2026 is Not a Delay
Some communications have led to confusion around a February 2026 reference. Here’s what it really means:
| Date | Purpose |
| October 14, 2025 | Official go-live date for T+1 settlement |
| February 2026 | Contingency buffer per Business Continuity Planning (BCP) |
The February 2026 mention is part of risk management planning—a fallback, not an implementation delay. Stakeholders must treat October 2025 as the actual operational launch.
🏛️ Market Readiness in Motion
PSX, NCCPL, and CDC have initiated:
- Mock trading sessions
- Technical guidelines for brokers and custodians
- Readiness assessments across the industry
This proactive coordination aims to ensure seamless transition across retail and institutional segments.
💬 Industry Insight
“T+1 settlement is a timely and strategic reform that will align PSX with leading global markets. It enhances liquidity and reduces settlement risks — a win for both institutional and retail investors.”
— Mohammad Sohail, CEO, Topline Securities
📊 Final Word
The upcoming T+1 settlement regime marks a decisive step toward modernizing Pakistan’s capital markets. With October 14, 2025, as the firm rollout date, all stakeholders are urged to gear up and leverage the efficiency and risk reduction this shift brings.
📢 Stay informed. Stay ready.
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